Japan boosted by GDP growth

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JAPAN yesterday beat forecasts by reporting fourth-quarter GDP figures which maintained its position as the world’s second largest economy.

Real GDP grew 1.1 per cent from October to December last year compared to the previous quarter – equivalent to an annualised growth rate of 4.6 per cent, according to official government figures. The boost means that the country is still slightly ahead of China, with the US still the biggest global economy.

Japan’s nominal GDP for the 2009 calendar year came to about $5.1 trillion (£3.25 trillion) ahead of China’s domestic output of $4.9 trillion (£3.1 trillion).

The boost was mainly due to government measures to stimulate Japanese spending on fuel-efficient cars and “green” consumer goods.

Public investment fell 1.6 per cent, while exports jumped five per cent, the figures showed.

The figures also indicated to growing confidence among firms, with corporate investment in plants and equipment rising by one per cent, its first increase since the first quarter of 2008.

Finance minister Naoto Kan said: “There is some brightness breaking through the clouds.”

China’s economy grew by 8.7 per cent last year and is expected to overtake Japan as the world’s second biggest economy this year. Analysts had tipped China to overhaul Japan in the latest figures. China is Japan’s biggest export market.